When looking to hire employees, you have two main options: hire them full-time (outsourcing), or hire them as contractors who will work on specific projects on an as-needed basis, also known as staff augmentation. Staff Augmentation vs. Outsourcing has many similarities and significant differences that you need to be aware of before deciding which one to go with.
Both outsourcing and staff augmentation allow you to focus on your business’s core objectives, even if you lack the necessary skills to accomplish them yourself. However, there are quite a few differences between the two services.
While there are benefits to both options, which one should you choose? This Staff Augmentation vs. Outsourcing comparison will give you the information you need to make the best decision for your business.
Comparison Table: Staff Augmentation vs. Outsourcing
| Comparison Parameters | Staff Augmentation | Outsourcing |
| Overall Cost | The company will fund the staff you hire and provide them with what they need to do their job. | An outsourcing vendor handles all of the expenses relating to the employees they hire and all of the project’s demands using their resources. |
| Main Objective | It is used to fill specific gaps or assemble a team temporarily. Suitable for short- and long-term and unpredictable projects. | It is suitable for when a company wants to keep projects at home and does not want to employ engineering talents. These positions are for both short- and long-term objectives. |
| Team Management Role | It will take some management effort, but the long-term rewards will be greater cohesiveness among your employees and fewer challenges when you need to hire people. | Though management is completely independent, the relationship between the outside team and the company staff is usually poor. |
| Onboarding Process | The onboarding process occurs swiftly since the client gets quick and on-demand access to needed resources and skills. | A project cannot start until it has been thoroughly researched, determined deliverables, and agreed-upon milestones. You must also finalize legal agreements before the project can proceed. |
I hope the above table gives you a clear idea of Staff Augmentation vs. Outsourcing. Let’s explore the pros, cons, and detailed comparison to ensure a more informed decision.
Staff Augmentation – Managing a Personalized Team
Source: Das InfoMedia
Staff augmentation, also called outsourcing, is when you outsource part of your business to an outside firm or agency to provide you with service. These services typically involve those tasks that you need but can’t offer yourself at this time mainly because you don’t have the necessary skills, tools, or personnel.
Staff augmentation is a term used to describe an organization hiring contractors to fill gaps in its workforce. It is not a catch-all solution for organizations looking to outsource all their IT work. There are many benefits and drawbacks to staff augmentation, which we will explore in this article.
Pros of Staff Augmentation
High Operational Efficiency:
Staff augmentation companies bring in highly skilled individuals with a deep understanding of project management to complete your task. It allows you to focus on business development, sales, etc., rather than spending valuable time recruiting and training staff.
Reduced Costs:
It’s much cheaper to pay an experienced team for a few months than hire full-time employees or even contractors for long-term positions.
Flexibility:
When you need a temporary workforce, it’s easy to hire them through an outsourcing company. You can scale up quickly if there is a sudden increase in demand for your product or service. It will help you understand what kind of resources are needed and how many customers are out there before you sink serious money into hiring permanent staff.
Convenient Option:
Finding reliable staff members is a challenging endeavor. It is often challenging to find, hire, and train people who will have sufficient experience to execute your vision for a project. With staff augmentation companies, you can outsource highly skilled workers who know how to complete your projects successfully.
Cons of Staff Augmentation
- You can’t just snap fingers to get a quality team up and running. It takes time for you and your offshore team to learn about each other, develop trust, and understand each other’s culture.
- While offshore staff augmentation is often less expensive than hiring a full-time employee, it’s important to note that your costs don’t stop there. You’ll also need to consider your time investment in training, managing, and overseeing your team.
When Should You Go For Staff Augmentation?
Staff augmentation is a reliable way to get a burst of effort for routine work that you or your employees can do but don’t have time for right now. You also can use it to fill in gaps during busy times of the year.
It’s also good if you want temporary staff to complete a specific project or phase of a project with little onboarding required (say, your company needs someone to help transition from an old software system).
Connect with Staff Augmentation Services India as it saves time and effort, and you’ll free up resources in your organization. It proves fruitful under the following situations:
- High-risks, low-volume tasks, where managing employees requires more effort.
- Unstructured projects with undefined steps don’t require a high level of creativity or input from your end client.
- When staffing needs are frequent and well defined.
- Your project needs to be customized or adjusted based on feedback directly obtained from you. Your provider cannot make adjustments quickly and efficiently without involving you.
Ideally, Staff Augmentation is best suited to small or big projects which require more extraordinary dedication and effort from the hired team of professionals. It offers you direct control over the engaged group of professionals, ensuring more excellent quality work as teamwork is more productive in staff augmentation.
Outsourcing – Completely Handing Over the Project
Source: Statista – Reasons Behind Outsourcing
For many businesses, IT outsourcing can offer significant benefits over running their own IT department, including lower costs, improved access to talent, and greater convenience in managing vendors and services. However, IT outsourcing has some drawbacks, including cultural barriers, security risks, and loss of control over your business’s systems.
Let’s explore the essential pros and cons of IT outsourcing so you can make an informed decision about whether or not: Outsourcing is suitable for your company.
Pros of Outsourcing
Great Skill Diversity:
IT outsourcing provides businesses with a breadth of skills that would be impossible to find in-house. As long as you got a reliable provider, you’ll be able to build up your team with a diverse range of expertise. And that means business owners can take advantage of having different people on hand for every little problem or query they may have.
Less Expensive than Hiring In-House Staff:
You’re probably well aware that managing an in-house team is costly. The cost can vary based on industry, but often it’s a fraction of hiring someone to work in-house. Outsourced contractors are far less expensive between salaries, equipment, benefits, and more.
Leverage Another Company’s Technology Investment:
If you can’t get all your technology up to speed quickly or you don’t have deep pockets, you can still reap many of these benefits by outsourcing some tasks. For example, suppose you have enough money for a new server but not a full-fledged virtualization system. In that case, you can use one provider to provide infrastructure services and another to manage it.
Cost savings:
Paying $50/hour for a programmer in California versus paying $20/hour for a programmer overseas means your company can make do with fewer employees. If you have too complex systems to handle by an internal developer, it may make sense to outsource development.
Cons of Outsourcing:
- It’s been said that a long distance makes the heart grow fonder. It isn’t necessarily true for communication, though, especially when things go wrong. Distance does make it more difficult to resolve any challenges that arise in real-time. When you outsource, issues can crop up without realizing it until it is too late to save a project.
- One of the biggest issues or errors with outsourcing is managing your remote workers and meeting deadlines. Most companies don’t even have procedures for how their employees are supposed to work together, much less how they should manage people outside their offices!
When Should You Go For Outsourcing?
Outsourcing proves a beneficial option under the following circumstances:
- Lower-risk, high-volume tasks (where managing employees is more accessible and affordable).
- Routine, structured projects with clearly defined steps that don’t require a high level of creativity or input from your end client.
- When staffing needs are infrequent and temporary (you can quickly terminate contracts at any time).
- Your budget isn’t big enough to support full-time hires, you still need help occasionally and on short notice for a quick turnaround (your provider can supply staff on demand for an hourly rate).
- You need to hire experts in a field that is not your company’s core competency (outsourcing providers can find, screen and train qualified experts for you).
- Your project needs to be customized or adjusted based on feedback from users (your provider can make adjustments quickly and efficiently without involving you).
- You’re looking for highly specialized skills that are difficult to find in your local area, your provider will likely have access to an international talent pool.
Final Words
So, which one is best for you? It might appear like a simple query, but there is not an easy answer. First of all, it depends on what you need. Second, it depends on what resources you have available to you and how much time you can invest in managing employees directly versus working with contractors from a distance.
It also depends on what your accounting department requires. Finally, if quality work is essential for your organization, a dedicated development team is your answer.
